Hey there, time traveller!
This article was published 7/1/2017 (527 days ago), so information in it may no longer be current.
‘Offer made to buy Port of Churchill"
That headline appeared in the Free Press on Jan. 9, 2016.
The "offer" came from what was said to be a group of northern First Nations led by the chief of the Mathias Colomb Cree Nation, Arlen Dumas, called the Missinippi Rail Consortium.
A month before that, officials from Omnitrax said they wanted to leave the Manitoba market and sell the roughly 1,000-kilometre-long Hudson Bay Railway and the Port of Churchill, both of which Denver-based Omnitrax acquired in 1997 with plenty of federal and provincial government support.
In late July, before the start of the eight-week shipping season, port staff was laid off, effectively cancelling ocean-going shipments for 2016 (trans-shipment to Nunavut communities continued).
After starting 2016 off with such a bang, the Omnitrax story was both surprisingly enduring and, at the same time, absent of any progress.
The announced intention to sell the Hudson Bay Railway and the Port of Churchill to a Dumas-led consortium at the beginning of the year never advanced much, even though officials had been saying throughout much of 2016 that a deal was imminent.
But in late December, Omnitrax put out a news release saying it had signed a memorandum of understanding (MOU) with the Dumas group as a prelude to the sale of its Manitoba assets.
"This is a big step, an historic step," Omnitrax Canada president Merv Tweed said.
The signing of an MOU is a way to create the appearance of activity and, at the same time, alleviate the signatories’ responsibility to do anything.
On at least a couple of occasions early in the year Tweed had said the deal with Dumas was proceeding well.
After the release of the MOU in late December, he said, "We hope it happens very, very quickly once all the I’s and T’s are dotted and crossed. We want this to happen as quickly as possible."
Dumas has made it clear in the past that federal government support would be necessary to accomplish the takeover. But what form that support will take still remains to be seen.
"There has been a series of different meetings and discussions (with federal government officials)... they are mindful of what it is we are wanting to do," Dumas said in late December.
Details of the discussions continue to be vague and there has been no confirmation from the federal government of support for whatever proposal Dumas has brought forward.
After fairly intense media focus through the summer, Innovation Minister Navdeep Bains visited Churchill and committed $4.6 million for economic development projects in Churchill.
None of that funding has been dispersed.
In the meantime, another group of northern Manitoba community leaders has organized an effort, called the Northern Delegation, to produce some kind of counter proposal to acquire the assets, led by Churchill Mayor Mike Spence and Christian Sinclair, chief of Opaskwayak Cree Nation.
Sinclair claims to have the support of every community along the rail line, including every First Nation and Métis community as well as Thompson, The Pas, Flin Flon and Churchill.
He said some First Nations that had originally supported Dumas’s proposal have rescinded that support and now back the Northern Delegation.
Both groups claim not to know what the other is doing, but Tweed is unequivocal about who Omnitrax is talking with.
In late November, he said, "Things are progressing with the Missinippi Rail Consortium led by Chief Dumas. We are currently in an exclusive arrangement with them and encourage all northern First Nations to work directly with that group."
After cutting its port staff, Omnitrax seems to have deployed more resources to its legal department in 2016 — it has filed two lawsuits against the province throughout the course of the year — than it has to its on-the-ground operations.
In late July, rail freight service to Churchill was cut in half, from two trains per week to one after having threatened to do so earlier in the year.
The 2016 shipping season was forfeited, but even if the company had not laid off its staff and had continued to market the port, it still might not have attracted any ships.
After a few public remarks early in 2016, Omnitrax officials went dark until mid-August, when the company’s Denver-based CEO, its Canadian president and other senior officials met with the Free Press.
Rumour and speculation filled the void left by the company’s refusal to discuss its plan.
Lost in that misguided strategy was the fact that shippers did not book a single bushel of grain out of the port for 2016.
Knowing that, it makes the staff layoffs and the cuts in freight trains more understandable.
But the reason the story endured with little action moving it along is the fact that the rail line provides a lifeline as the only all-season ground transportation for much of Manitoba north of Thompson.
It is a singular transportation infrastructure that would likely costs billions of dollars to construct were it to be built today.
Churchill has the only Canadian deep water port in the Arctic Ocean and the rail line through northern Manitoba is the only rail line anywhere in the country connecting to any Arctic Ocean port, irrespective of the depth of the harbour.
Martin Cash has been writing a column and business news at the Free Press since 1989. Over those years he’s written through a number of business cycles and the rise and fall (and rise) in fortunes of many local businesses.